WEB NEWS Reverse Merger Activity
On October 1, 2011 became a public entity via a
reverse merger transaction.
Company Snapshot:
An iron ore exploration, processing and high grade iron ore concentrate producer.
Industry Snapshot (from the company)
Iron ore is the main source of iron for the world’s iron and steel industries. It is an essential component used in the production of steel. Approximately 98% of the global supply of iron ore is used in steelmaking. Iron ore refers to rock that contains a sufficient level of iron minerals that can be mined economically for iron. Iron ore is mainly composed of compounds of iron and oxygen (iron oxides) mixed with gangue, or impurities that are not generally utilized commercially. The most common types of iron ore are magnetite and hematite. Other iron ore types that are naturally occurring include limonite, siderite geothite, pyrite, chamosite and greenalite. When heated in the presence of a reductant, iron ore will yield metallic iron (Fe). Iron ore is graded according to size as “lumps” or “fines” based on whether the individual particles have a diameter of more or less than six millimeters. Iron concentrate is the valuable fines that are separated commercially from iron ore in the form of rock with gangue by crushing, grinding, and beneficiation and can be agglomerated before being used in an iron making blast furnace or a direct reduction furnace. Iron ore is used directly as lump ore, or as concentrate or fines converted into pellets or sinter.
Iron is produced from iron ore by one of three methods:
1.
blast furnaces (e.g. pig iron);
2.
direct reduction processes (e.g. DRI, HBI); or
3.
direct smelting process (e.g. HISmelt, FINEX).
The latter two methods are often grouped together and referred to as “alternative iron making” processes, as together they represent a relatively small portion of the iron market. The diagram below illustrates the general production process.
Post Merger Share Calculation:
100: Pre reverse merger outstanding share
8,000,000: Newly issued shares of Common Stock
GeoTeam® best effort calculation of total post reverse merger shares assuming full conversions: 8,000,100
Financial Snapshot: December Year End
2010 vs. 2009
Revenues:$12,761,246 million vs No revenue
Adjusted Net Income: $3,253,109 million vs. a loss of $833,092
Six Months 2011 vs 2010
Revenues: $4,377,375 million vs. $7,702,416 million
Adjusted Net Income: $1,121,976 million vs. $2,358,875 million
Pro Forma Valuation : using price and new share count
Trailing EPS (ADS): $0.25
Trailing P/E: Stock is not trading yet.
Liquidity Requirements
Chinese demand for iron or steel products has increased at a rate of nearly 10% annually in recent years. We believe demand for high quality iron ore concentrate will continue to grow domestically and globally, thus affording us an opportunity to grow and expand our business operations. We intend to seek to grow our business through the acquisition of other mines and production facilities, in particular, by acquiring the right to mine in the areas surrounding our current production facilities.
We anticipate that some of our acquisitions will be of existing mines and some will be of undeveloped properties. In all cases, they will be properties with established reserves. Our five-year goal is to control 50 million tons of reserves and to produce iron ore concentrate up to 1.1 million tons per year. Our primary criteria for selecting target mines are as follows:
1.
the resources, reserves and mining operations of the target mines;
2.
the grade, mining costs and sustainability of the target resources and reserves;
3.
exploration potential;
4.
the financial costs and benefits of the acquisition;
5.
valid land use rights and property ownership and no material legal risks; and
6.
the contributions of the acquisition towards the overall sustainability of our business
We will finance our acquisitions, as well as the improvements necessary to existing mines and the development of mines on undeveloped properties, by using internally generated cash, as well as cash raised by issuing equity securities and debt financing.
